Is the traditional MSP model still fit for purpose? - The EE

Is the traditional MSP model still fit for purpose?

Tarek Meliti of TDM Group

When casting our minds back to March last year, the MSP (managed service provider) community and our customers went through an initial period of incomparable disruption, dealing with damage to businesses predominantly in the hospitality, retail, travel and tourism industries, says Tarek Meliti, CEO at TDM Group.

Those customers, who never previously relied on MSPs, sought the sectors help due to the sudden need to support the global shift to remote working. This was particularly the case with small and medium-sized businesses (SMBs), which were the least likely to have planned for such a seismic change in operations and needed to rapidly alter the way they worked and the technology they used to ensure business continuity.

As a result, the managed services model has become more valuable amid the Covid-19 pandemic, opening a swathe of new opportunities for our community to grasp.

However, it is easy to get caught up in the fog during a period of widespread disruption. As we shift our attention to driving business recovery post-Covid, it is important to now take a step back and ask ourselves: does the traditional MSP model offer everything businesses need to bounce back better?

MSPs ­suppliers of vital day-to-day IT services have the potential to save businesses time and money by adding value to the daily operation of the IT department; while also increasing skills, knowledge and vigilance. However, in isolation, an MSP might lack the foresight required to harness technology’s potential to act as part of the business as an enabler. Instead, it remains a cost centre: an essential department that doesn’t directly add to profit but still costs the business money to operate. 

The traditional MSP model and its limitations

Broadly speaking, an MSP is an outsourced third-party company that manages and assumes the responsibility of a defined set of day-to-day management services to its customers. In terms of IT, this mainly includes networks, applications, infrastructure and security, via ongoing and regular support and active administration on customers’ premises, external data centres (hosting), or in the public cloud.

Why is this model useful? As a business grows, its technology and IT needs also grow, which can lead to an added workload on existing IT teams. Bringing in an MSP, therefore, can help free up teams and bring in the necessary technical expertise to support a business’ changing IT needs. When a business chooses to work with an MSP, they will also usually receive a Service Level Agreement (SLA), which guarantees a base level of quality of service to the customer.

For many businesses, MSPs can provide the means to shift from a CAPEX (capital expense) model, towards an OPEX (operating expense) model, offering an immediate impact to a bottom line. Ultimately, on paper at least, MSPs have the potential to save your business time and money, while also increasing your skills, knowledge and technical capabilities. A return on investment such as this is highly valued amongst many businesses especially the most cash-strapped, as employees pick-up and retain vital skills at no extra cost.

MSPs and their Achilles heel

As mentioned, this model has been widely deployed throughout the pandemic, providing businesses and their IT departments the tools they need to rapidly and securely pivot from a brick and mortar operation, to a remote one. However, even before the pandemic, this model and the businesses that employ it have often been constrained by the Achilles heel of MSPs: who mainly focus on the technical aspects of IT.

In other words, despite adding value to the daily operation of an IT department, MSPs largely concentrate on addressing typical IT-related pain points, such as unsupported users and devices, or neglected networks and data concerns. However, this approach may impact the potential of an IT department to act as a business enabler. In reality, it often remains a cost centre, or an essential department that doesn’t directly add to profit but still costs the business money to operate. As a result, attitudes towards IT departments are often negative; they’re viewed as the gatekeepers of technology, with the power to derail projects or add unwanted delay to positive business change.

Yes, technology and supporting the daily operation of an IT department has the power to deliver greater efficiency and create new competitive advantages, particularly for SMBs that may not have the right in-house capabilities. Yes, the MSP community has played a critical role as suppliers of IT services throughout Covid-19.

However, even before the pandemic started, business leaders were looking for partners that looked beyond the IT department to harness its true potential and add tangible value, rather than simply keeping things ticking along as they were. Prior to Covid-19 there was a desire amongst businesses to work with MSPs that provided a more comprehensive and transformative level of support, particularly when it came to smaller enterprises. In the context of Covid-19 and the present need to drive recovery and growth, there now is an obvious opportunity for MSPs to revisit and rethink this demand to evolve and diversify their services.

M-BiTS: going beyond the norm

The first step in this journey for the industry, is to recognise that there’s much more to managing IT and digital transformation than just technology and being responsible for a defined set of day-to-day management services. Not only must we acknowledge this, but we must also look at how we can add to our tried-and-tested, traditional model and offer an IT strategy that considers an organisation as a whole not just the technology.

Imagine your business could engage with an IT partner that offers the complete package: IT services that address common day-to-day technical pain points, while also considering the impact technology has on the entire business and its growth strategy the perfect mix of technical know-how and business acumen. If you think about the bigger picture, you will find yourself on the path to discovering a partner that does just that AKA a Managed Business IT Service (M-BiTS) provider. 

An M-BiTS offering recognises there is more to IT and digital transformation than just technology. In fact, there are various building blocks within a business that not only need considering; they need to be balanced and a good relationship maintained between them to manage IT operations effectively and deliver innovative change.

To identify and most importantly understand these building blocks, let’s refer to a framework for managing effective organisational change that was first created by Harold Leavitt in the 1960s. Originally called the ‘People, Process, Technology’ framework, it has changed as society has become more digitised and now includes data.

So, whether a business is engaging with existing IT systems or exploring new ones, an M-BiTS offering considers the interactions of people at every stage of the process from the suppliers to the users and management. This holistic approach recognises that each building block (data, process, technology) is underpinned by a human element.

With people at its core, opting for an M-BiTS-style service means businesses are privy to a comprehensive strategy that delivers relevant IT services within the context of the business, helping align the business’ IT requirements, with the business strategy. In practice, this means that potential weaknesses and vulnerabilities within an organisation can be easily identified, not just in terms of technology, but people process and data as well.

Driving SMB recovery

It is no secret that the traditional MSP model works; it is well established, proven and allows businesses of all sizes to save vital time and money. At the same time, it is obvious it has its limitations and falls into the trap of mainly focusing on the technical aspects of delivering an IT service, leading to many businesses viewing it as an expensive, inhibitive cost centre.

Despite the ongoing challenge of supporting SMBs with rebuilding and rebounding during the pandemic, there has been a need and desire amongst business owners to work with MSPs that have an M-BiTS style offering and a holistic approach to managing IT.

The M-BiTS service goes further than simply addressing typical IT-related pain points. It considers the impact technology has on the entire business and its growth strategy, helping to drive a business forward. As such, SMBs that opt for an MSP that have developed this additional string to its bow will be better supported and in a stronger position to recover in a post-Covid landscape.

The author is Tarek Meliti, CEO at TDM Group.

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